MDER stands for Market Determined Exchange Rates. In MDER the forces of demand and supply of dollars in India determine the exchange rates. There are 3 determinants of rate of exchange.
1. Fixed exchange rate system.
2. Floating exchange rate system.
3. Managed floating rate system.
Payments in foreign exchange results in demand for foreign exchange and Receipts in foreign exchange results in supply for foreign exchange. Demand and supply determines the rate of exchange.